Page 45 - Your Home-Buying Packet:
P. 45
GLOSSARY
HOMEOWNERS ASSOCIATION FEE (HOA) MORTGAGE
A fee required when you buy a home A loan from a bank, credit union, or
located within a community with an HOA other financial institution that relies
that typically pays for maintenance and on real estate for collateral. The bank
improvements of common areas and may provides money to buy the property,
include the use of amenities. and the borrower agrees to monthly
payments until the loan is fully repaid.
HOMEOWNER'S INSURANCE
Insurance that provides you with property MORTGAGE INSURANCE
and liability protection for your property Insurance that protects the lender
and family from damages from a natural and repays part of the loan if the
disaster or accident. Lenders usually borrower defaults and the loan can't
require borrowers to buy be fully repaid by a foreclosure sale.
homeowner's insurance. Usually required on loans with less
than a 20 percent down payment.
HOME WARRANTY
A contract between a homeowner and a PROPERTY TAXES
home warranty company that provides for Typically imposed by local
discounted repair and replacement service governments on real property
on a home's major components, such as including residential real estate. The
the furnace, air conditioning, plumbing, tax rate can change annually, and
and electrical systems. the assessed value of your property is
usually recalculated annually.
LENDER FEES
Part of the closing costs of a home PREPAIDS
purchase and may include an application Prepaids are expenses paid at
fee, attorney fees, and recording fees. The the closing for bills that are not
lender's underwriting or origination fee is technically due yet, such as property
usually 1 percent of the loan amount. taxes, homeowner's insurance,
mortgage insurance, and HOA fees.
LOAN TYPES
Mortgages have different terms ranging THIRD-PARTY FEES
from 10 to 30 years and are available Any closing costs charged by
with fixed or adjustable interest rates. someone other than your lender,
Your lender can discuss down payment, typically including fees for an
insurance, credit requirements, and other appraisal, a property survey, a title
specifics of various loan types. search, owner's and lender's title
insurance, and sometimes
MONTHLY DEBT an attorney.
The minimum payment on credit card
debt; auto, student, and personal loan
payments; and alimony or child support.
Rent or mortgage for a property that you
will pay after your home purchase must
also be included.
